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How digital transformation helps brand manufacturers build resilience

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How digital transformation helps brand manufacturers build resilience

The manufacturing sector faces turbulence worldwide as a looming recession, rising geopolitical tensions, and market volatility hamper performance and growth. Building resilience is now a mission-critical concern for brand manufacturers dealing with unprecedented supply chain disruptions, inventory shortfalls, labor shortages, and shifting consumer behaviors. Despite the clouded outlook, almost 80% of manufacturers have increased spending on digital technologies in the last two years, with a similar number planning to do so in the next two.

A company’s capacity to adapt to a changing business environment and innovate to survive unexpected events plays a key role in determining its ultimate success. Those who proactively invest in a digital enablement strategy to drive value from data and improve performance will reap the benefits. Industry leaders must promote innovation in areas that will improve operations, accelerate production, improve the quality and flexibility of manufacturing processes, and respond successfully to consumers' changing needs.

Brands on the path to creating a resilient industry rely heavily on digital transformation. That’s why 95% of manufacturing companies agree that digital transformation is essential to their future success. It promotes a culture of organizations doing more with less as they become more efficient with resources. In this article, we’ll look at what digital transformation means for manufacturers, how they can use technology-based automation to improve their operations, and why data is at the center.

What is digital transformation in manufacturing?

Manufacturing companies have in the past relied on traditional business models and methodologies such as benchmarking, total quality management (TQM), and Kaizen. These approaches helped companies achieve only incremental improvements in specific areas. But they were unable to access all the necessary information, handle substantial amounts of data, and analyze it effectively. Now, a growing number of businesses require better infrastructure to function at a truly smart level, using digital technologies to create or improve business processes, culture, and customer experiences. Any process that can be made digital — may it be migrating legacy systems to the cloud, purchasing materials, or using third-party service providers — is considered.

With the rise of Industry 4.0, manufacturers are automating production lines and increasing efficiency through digitization and datafication. As manufacturing companies step up their digital transformation efforts, they must make targeted and cost-effective investments in new tools and technology to see meaningful returns. The right applications of technology, including the Internet of Things (IoT), artificial intelligence (AI), cloud computing, and 3D printing, have the potential to help manufacturers overcome critical constraints. To remain competitive, by 2020, nearly a quarter of top-tier manufacturing businesses had adopted AI-based solutions, and by 2021, this increased dramatically to 76%.

Why is digital transformation in manufacturing key to success?

The benefits of digital transformation in manufacturing are wide-ranging. But for most companies, digital transformation requires a shift from traditional thinking to a more experimental approach. Brands like Reebok are already transforming the industry with new sophisticated software and robotics that creates shoes with a 3D printing process. Ultimately, successfully implementing a digital transformation strategy in manufacturing requires combining the right technology, a supportive culture, and a focus on data. Let’s look at the main benefits digital transformation can bring:

  • Resilient supply chains
    Supply chain resilience requires visibility, and digital solutions are crucial to achieving transparency. Implementing IoT tracking solutions across the supply chain is key. These devices provide real-time updates on product or part locations, conditions, and other factors. Businesses can then run this information through predictive analytics engines which will make it far easier to see and react to potential disruptions, mitigating shortages and delays.
  • Lower operating costs
    Having a system in place that knows how to automatically interpret data and consolidate it in digestible chunks can drastically reduce costs across all departments. Connected machinery offers a range of benefits to manufacturers such as diagnosing problems before they arise and planning maintenance during downtime for gains in productivity. By digitizing information-intensive processes, costs can be cut by up to 90%, allowing companies to free up resources and focus on core business objectives.
  • Personalization and customer centricity
    One of the biggest challenges for manufacturers is personalizing products at scale. 40% of customers are willing to spend more than planned when the shopping experience is highly personalized, but they desire the same responsiveness and speed from B2B companies as they do when buying generic products. Accomplishing this requires an agile business model and investment in data-driven technologies that will give customers the ability to choose their desired options, and companies the chance to manufacture and deliver them quickly, while still maintaining a cost-effective operation.
  • Higher productivity
    One of the biggest advantages of digital transformation in manufacturing is higher productivity. Manufacturers are leveraging hyperautomation to remove human errors from their manufacturing processes as smart machines minimize downtime by optimizing themselves based on previous data or giving notice when something needs to be repaired. Hyperautomation involves integrating artificial intelligence (AI) and machine learning (ML) to augment human activity.
  • Resiliency
    Resiliency is crucial to thriving in challenging circumstances. Manufacturers must be able to anticipate and respond to challenges to stay ahead of the curve. Digital technologies help manufacturers by operating remotely, harnessing flexible automation, and connecting the supply chain with a cloud-based infrastructure. These technologies lead to predictive maintenance, self-optimization of processes and a new level of efficiency, adaptability, and responsiveness that was not previously possible.
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Why is data key for brand manufacturers?

Data is at the heart of a successful digital transformation. It has long been the foundation upon which businesses build their processes. Manufacturers are generating mountains of data from a growing array of IoT devices, innovative technologies, and increasingly connected suppliers, vendors, partners, and customers. But without a comprehensive view of the entire manufacturing operation, such as product quantities, timescales, and other logistical details, executives can’t make effective decisions. That's why 72% of manufacturing executives consider advanced analytics more critical now than three years ago.

Effective use of data can make brand owners more productive, profitable, and resilient. In a 2022 Industry Pulse survey, manufacturing and distribution executives agreed that real-time intelligence is crucial in managing their supply chains under volatile business conditions. Without robust, data-driven insights, most organizations struggle with identifying priority actions and finding synergies across business lines. To tackle this, industrials should analyze data-related issues in their roadmaps. What are the data architecture requirements, and how can they eliminate silos? Should a data governance strategy be implemented? And how should they prioritize data solutions?

How can brand manufacturers capture value from data?

Data and analytics are increasingly critical elements. Organizations need data they can leverage to improve internal and external processes, encourage collaboration, and engage their customers. Investing in a robust data and analytics infrastructure is critical for manufacturers looking to take advantage of the opportunities presented by Industry 4.0.

By implementing intelligent data governance tools, businesses understand where they are going with their data, how they should manage it, and what the value of that data represents to their organization. The insights generated from this data can help manufacturers make informed decisions, identify risks and improve their processes. According to a report from the World Economic Forum, featuring insights from over 40 manufacturers, there are six priorities that companies should focus on to capture value from data and analytics in manufacturing:

  • Define a data-to-value strategy
    Developing a roadmap helps select the applications that align value creation and capture and create data transparency. With a clear target and an accessible and easy‑to‑understand implementation roadmap, organizations can optimize team communication and support change management.
  • Incentivize internal and external ecosystem partners
    Internal and external partners often need incentives to collaborate in an ecosystem and share data. Incentives can support partners in overcoming barriers and offer a unique opportunity to incorporate partners’ data, gaining valuable insight and access to prospective customers.
  • Develop capabilities to capture and use data
    The right combination of digital and manufacturing skills allows companies to translate insights into tangible actions in factories and supply systems. For example, companies can apply insights arising from improved transparency in quality data to optimize the production process.
  • Implement a centralized platform to reduce data silos
    A centralized, cloud‑hosted platform helps companies reduce data silos by promoting data sharing within the company and across company boundaries with suppliers, partners, and customers. The centralization of data from various sources supports the development of new use cases and insights.
  • Enable connectivity in data flows
    Most applications require uninterrupted low‑latency, high‑bandwidth data transfers from assets throughout the factory and supply systems. Wireless connectivity makes it possible to constantly connect mobile assets and goods to a central platform, enabling an uninterrupted stream of data.
  • Ensure data security and privacy
    Data privacy is essential for manufacturers to share sensitive data and ensure that it’s used only for the intended purpose. Security includes providing redundant structures and shared ledgers to safely exchange data between separate systems and companies.

How does PIM provide a competitive edge for manufacturers?

In a globalized world where over 20% of retail spending is online, consumers can find and buy products anytime, anywhere like never before. That’s why ecommerce is on the radar for most industrials. Manufacturers are discovering new sales channels and selling directly to end customers through their web shops. As a result, having accurate, complete, and localized product data and corresponding digital assets is becoming crucial. Be it for B2B or B2C purposes, a Product Information Management (PIM) system is a vital part of a manufacturer’s digital stack — helping digitalize and streamline data management. Here are some of the ways PIM can benefit your manufacturing business:

    • Faster time to market
      A PIM system allows product information to be ready for market faster — which is particularly important for companies that work with multiple channels, languages, and regions. All product data is handled centrally in a unified, consistent, and predictable manner. When a launch or campaign approaches, everything will be ready and easy to compile for the intended purpose.
    • Optimized creation of product sheets
      To manufacture several different products, often with multiple variations, data sheets must be kept accurate. Manually updating product information through spreadsheets can cause several inaccuracies and delays. A PIM system enables teams to create and update product sheets quickly and effortlessly through a centralized database. The latest data is stored in the PIM, meaning the entire company will always be able to access the most recent version.
    • Compliance with global standards
      Varied global standards need to be followed and maintained for a multitude of product types. Effective integration with global data pools such as GDSN enables retailers and distributors to comply with regulations while providing accurate, rich, and compliant product information to empower engaging customer experiences.
    • Product data centralization
      PIM for the manufacturing industry makes it easier to ensure all descriptions and product categories are uniform, making products easier to find and list. By centralizing product data management in a single platform, different teams have access to consistent product information and can respond to market demands faster.

Embracing digital transformation in manufacturing

Digital transformation is revolutionizing all aspects of manufacturing — which is shifting towards a hyperconnected network of assets, factories, and supply systems. 81% of manufacturers are now ready to invest in new digital technologies to boost productivity and provide relief. Manufacturing companies have an excellent opportunity to future-proof their business with solutions that can help them become resilient amidst unforeseen events and scale with them when they inevitably expand.

Integrating the right technology to cater to the industry’s unique requirements while delivering exceptional buying experiences will separate the wheat from the chaff. But manufacturers must move quickly from the planning phase to implementation to achieve an advantage and capture value from customers who are eager to find businesses that offer a seamless omnichannel experience. Given the challenges inherent in a paradigm-altering shift like digital transformation, it’s important to avoid doing it alone. Transformation efforts based in industry and vertical expertise are more likely to fit your individual circumstances and result in better solutions.